Unveiling Vertical State Downscaling: Identity and/or the Economy?
AbstractState rescaling may take a variety of shapes although scant research has been carried out into the mechanisms and economic incentives that underpin rescaling processes. This paper identifies and measures the effect of two broad state downscaling mechanisms, namely the development of regional identity - operating at the cultural level and proxing preference heterogeneity-, and the heterogeneity in levels of economic development; influencing the extent of regional redistribution. Firstly, we empirically examine our claim at an aggregate level using evidence from Catalonia and the Basque Country, to examine the evolution of sub-state identity and the rise of inter-territorial fiscal grievances - weakening intraregional economic solidarity. Secondly, we estimate how the combination of widening sub-national identity and regional redistribution strengthens support for vertical state downscaling. Findings suggest an expansion of spatial identities in both Catalonia and the Basque Country since the early 1980’s. Ending regional fiscal solidarity it is found to increase the average income of Catalonia and the Basque Country by 37% and 17% respectively. Although we find evidence of elite driven support for state downscaling, the effect of regional identity on downscaling support exceeds that of regional redistribution in the magnitude of one to seven.
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Bibliographic InfoPaper provided by London School of Economics / European Institute in its series Europe in Question Discussion Paper Series of the London School of Economics (LEQs) with number 0.
Date of creation: 01 Mar 2010
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regional policy; regions; decentralisation; Spain;
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- Jordi Pons & Ramon Tremosa-i-Balcells, 2003.
"Macroeconomic Effects of Catalan Fiscal Deficit with the Spanish State (2002-2010) (?),"
ERSA conference papers
ersa03p128, European Regional Science Association.
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- Mikel G�mez Uranga & Goio Etxebarria, 2000. "Panorama of the Basque Country and its Competence for Self-Government," European Planning Studies, Taylor and Francis Journals, vol. 8(4), pages 521-535, August.
- Wittman, Donald, 1991. "Nations and States: Mergers and Acquisitions; Dissolutions and Divorce," American Economic Review, American Economic Association, vol. 81(2), pages 126-29, May.
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